China’s auto sales are redlining. First to recover from carmageddon China had jumped into double digit growth territory in February and never looked back. Months after month, the increases became bigger. Now, they explode.
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The New York Times reports that GM will offer 2.5 billion shares of common stock in July 2010, just a year after emerging from government-backed bankruptcy. The news comes from regulatory filings in which GM says it will also begin sharing financial data after the third quarter. The Wall Street Journal voices serious doubts as to whether GM is ready for such an offering, pointing to its weak showing in the current cash-for-clunkers bonanza, falling sales, and product weakness. Meanwhile, PTFOA chair Ron Bloom tells the NYT that a Chrysler IPO is further off. “I don’t think Chrysler’s IPO is a 2010 event,” Mr. Bloom said at the Center For Automotive Research’s conference in Traverse City. “I think it’s a little further off. But again, that will be the board’s judgment.”
Yes, yes: I’m a Tesla naysayer. Have been right from the start when the media went ape shit for a car that hadn’t been built, repeating performance claims as if they were written on Moses’ stone tablets. (Which were eventually modified.) But I did take them off the “Tesla Birth Watch” when the car deliveries began. And we haven’t posted a “Tesla Death Watch” entry since May 1, 2009. If true, this report from TechCrunch—claiming profitability for the EV maker—indicates that we should cancel the TDW altogether. Cynic that I am, I see some pretty major caveats here. “Silicon Valley’s electric car company, Tesla Motors
, says that it hit profitability in July. The private company reports that it made ‘approximately $1 million of earnings’ on revenues of $20 million, and that it shipped 109 Roadsters, its $109,000 all-electric sports car. The revenues reflect GAAP accounting standards and are only for the month of July.” Given that GM used a predicted (but not realized) Department of Energy (DOE) loan in their financial projections, does Tesla’s half billion dollar-or-so DOE suckle have anything to do with this?
I received this report of a delayed showroom arrival for the new Buick LaCrosse. “Hi my folks are interested in the new 2010 Buick LaCrosse. What an outstanding looking vehicle from Buick/GM. My father called the dealership and they said that the new LaCrosse was shipped then pulled back by Buick. Any news on why? Thanks! Michael” I contacted one of our tipsters. Apparently, “The BCM and ECM aren’t communicating properly. Pop the hood, tinker with something and have someone open the door at the same time and BINGO you’ve got trouble codes galore. You have to go to the dealer to clear them—and that wipes out all memory systems. GM’s having major meetings trying to sort it out. They may have to rewire the platform.”
It takes £2,239,300,000 (US $3,749,250,000) in subsidies to operate mass transit programs in the UK’s capital city, according to the Transport for London Annual Report and Statement of Accounts released this week. These subsidies come from a number of taxes imposed on motorists who in many cases do not use public transportation. London’s most burdensome levy on drivers, the congestion charge, is so inefficient that for every £10 taken from drivers, £6 is spent on the bureaucracy required to administer the charge.
The autoblogosphere is abuzz with debate over the Department of Transportation’s (DOT) list of the top ten Cash for Clunking vehicles. To say the least. Edmunds [via CNN] reports that the DOT counted vehicles EPA-style, tallying differing powertrain or drive wheel combinations separately. For example, the DOT rates a Ford Escape with two wheel-drive as a distinct model from a Ford Escape with all wheel-drive. If you’re Edmunds (or any one else with an ounce of common sense), you combine all the model variants’ sales totals into one stat. And if you do that, you get a horse of a different color. The implication making the rounds: the DOT manipulated the data to hide the fact that a brace of SUVs and pickup trucks made the top ten; the Cash for Clunkers program is supposed to be about saving the environment. Yes, well, high margin pickup trucks offer the best chance of saving the domestics. So, let’s compare the DOT list (as of August 7) with Edumunds’ take . . .
As my father would say, another myth exploded. Eddie Alterman brought David E. Davis back to Car and Driver to . . . what? Restore lost street cred? Re-connect with baby boomers who left the buff book in disgust at its fall from Wilkinsonian grace? Who knows. But one thing is for sure: Davis’ latest column is an unconscionable, virtually unreadable sop to Ford, CEO Alan Mulally and the dead-in-the-water Lincoln brand. Davis starts as he means to finish, deploying prose that’s the metaphorical equivalent of Huggy Bear’s wardrobe: “Mr. Mulally has now demonstrated beyond all doubt that he’s the real thing, and his revamped Ford Motor Company, with a terrific portfolio of new products, is rolling proof.” Strip away the Bend Down Low vibe and sure, you could make the case. But it doesn’t take Davis but a brace of paragraphs to stretch both credibility and credulity to the breaking point. “The Lincoln MKT is the latest of several new products that are helping Ford regain lost territory.” Speaking of losing it . . .
Never one to miss a chance to put a left/right slant on, well, anything, today’s New York Times contains an editorial claiming that the Cash for Clunkers (a.k.a. C.A.R.S.) program is a triumph of the Obama administration over Republican naysayers/hypocrites/rat bastards. Blogger Timothy Egan begins by suggesting that C4C is a Republican-style economic stimulus thingie, then excoriates the elephant party for not loving it long time. “They hate it, many of these Republicans, because it’s a huge hit. It’s working as planned, and this cannot stand. America must fail in order for President Obama to fail. Don’t be surprised if the tea party goons now being dispatched to shout down town hall forums on health care start showing up at your car dealers, megaphones in hand.” Incendiary much? I’ll have mine with a side order of sarcasm, please. “But try to give struggling families a one-time boost to buy a more fuel-efficient car, with an amount that wouldn’t pay for paper clips at A.I.G., and it’s . . . outrageous!”
If the Porsche Turbo looked any the same as the 1976 model unleashed 33 years ago, I’d be fine with it. But that’s silly. While you go through life things get old. They need to be refreshed and eventually get redesigned. It’s a natural evolution, just look at your own hair. In the car business, people stop buying old product when there’s no buzz. If there’s no buzz [Ed: buzz cut?], the products eventually perceived as played. Then, eventually, it peters out. Hence Porsche going back to the salon for the seventh generation 911 Turbo.
Now that the Department of Energy (DOE) has doled out some $25 billion to help automakers retool taxpayers—I mean, retrofit factories to build incrementally more fuel efficient vehicles than the ones built at the same locations previously—the agency is continuing its cash for anything environmental program. Our old friend E85 is the beneficiary of a $5.5 million handout as part of the American Recovery and Reinvestment Act. The money goes towards two noble goals sure to get the American economy on its feed—I mean feet. First up: “outreach.” Which is Fed-speak for pro-industry propaganda, presumably . . .
Your Shitty Economy (YSE) Car of the Week: the 2005 Lexus LS430. The LS has to be one of the most boring cars in the biz. To paraphrase Jonny Lieberman, grab the wheel and you’re driving Muzak. Handling, sportiness and excitement are as far from the LS430’s vocabulary as Hungarian is from Creole. But even enthusiasts can respect the LS’s superb NVH engineering, which make it one of the best interstate cruising cars on the market, period. The LS’s exterior styling apes the 1990s Mercedes S-class—in the sense that a used bar of soap apes an identical new one. With Toyota parts bin pieces littering the interior, everything fits and we’re finished. Small prices to pay for understated elegance and supreme reliability in the best Cadillac Cadillac never built. Go ahead, ditch the new Camry and treat yourself to this certified LS for only $24,995. Note: narcoleptics need not apply.
Car dealers know a good environmental policy gimmick when they see one. Some 60 dealers (so far) have banded together to launch a new official-looking program that offers consumers between $500 and $4,500 of “incentives” for their used or . . . wait for it . . . new car. Welcome to autostimulusplan.com world! Automotive News [sub] tries (and fails) to adopt a suitably cynical tone for the story. “The dealer program is less restrictive than the government’s. For example, it allows shorter leases than the 60-month minimum required by the clunkers plan, and there’s no limit on the price of the new vehicle; the government program sets a $45,000 cap. A qualifying trade-in must be a 2006 model or older and must have been owned by and registered to the same person for six months. The dealer program requires a buyer to purchase a replacement vehicle with 2 mpg better fuel economy.” Or, you know, maybe not (nudge nudge, wink wink). You want fine print? They got fine print!
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